An employer is liable to pay his employee(s) within seven days after the end of the salary period, in accordance to the provisions of Part III of the Employment Act. Failure to pay salaries in accordance with provisions of the Employment Act is an offence. Employees who are not paid for work done can report employers to the Ministry for investigation.
Employees in managerial and executive positions who earn basic monthly salaries of $4,500 and below are only covered partially on the basic payment of salary. Other types of employees covered under the Act are also covered for unauthorised deductions of salaries.
If an employee is not covered under the Employment Act, he may consider consulting a lawyer to assess if his employer has breached the terms of his employment contract.
The Tripartite Partners have come up with a set of guidelines to guide employers in issuing itemised payslips and to institute good HR practices. All employers are strongly encouraged to comply with these guidelines. We will closely monitor the adoption of the guidelines, before phasing in the requirements over time.
Payment of salary
This section applies to all employees covered under the Act, inclusive of persons holding managerial and executive positions who earn basic monthly salaries of $4,500 and below.
Salary refers to all remuneration including allowances payable to an employee with respect to work done under the contract of service. IT DOES NOT INCLUDE:
- The value of accommodation or quarters, supply of light, water, medical attendance or other amenities;
- Pension or provident fund contribution paid by the employer;
- Travelling allowance;
- Payments to defray special expenses incurred in the course of duty;
- Gratuity payable on discharge or retirement; or
- Retrenchment benefits (if provided).
There is no minimum wage/salary in Singapore. Salary is subject to negotiation and mutual agreement between an employer and an employee or the trade union representing the employees.
Frequency of salary payment
An employee must be paid at least once a month. However, employers are allowed to pay salaries at shorter intervals.
In general, all salary component must be paid within 7 days after the end of the salary period. The following are exceptions:
||Salary must be paid
||Within 14 days after the end of the salary period.
|Dismissal/Termination by Employer, if
- The employee is dismissed on grounds of misconduct; or
- The contract of service is terminated by the employer.
|On the last day of employment.
If this is not possible, it must be paid within 3 working days from the date of dismissal/termination.
|Termination by Employee, if
- The employee terminates the contract by resigning and has served the required notice period.
|On the last day of employment.
|Termination by Employee, if
- The employee terminates the contract by leaving employment without notice or without serving the required notice period.
|Within 7 days of the last day of employment.
Salary should be paid on a working day and during working hours at the place of work, or at any other place agreed to between the employer and the employee. It may also be paid into an employee's personal/joint bank account.
Payment of commission when an employee has left employment
An employee's entitlement to commission payment and the time of commission payment would depend on what is stated in the employment contract or existing policies/practices. If the contract is silent, it is subject to negotiation or mutual agreement between the employee and the employer.
This section applies to all employees who are covered by the Employment Act. However, it does not apply to persons holding managerial and executive positions earning basic monthly salaries of $4,500 and below, who are only partially covered on payment of salaries.
Allowable types of salary deduction
Employers can only deduct salary for reasons allowed under the Act, or if ordered by the Court. Compensation should generally be recovered directly from employees, rather than through a salary deduction.
Salary deductions allowed under the Act are:
- For absence from work. For a monthly-rated employee, the deduction shall be calculated in accordance with the appropriate formula in the Third Schedule of the Act.
- For damage to or loss of goods entrusted to an employee for his custody, or for loss of money which an employee is accountable for, where the damage or loss is directly attributable to his neglect or default. This is to be determined by an inquiry to be held by the employer. No deductions shall be made unless the employee has been given an opportunity to explain the cause of the damage or loss and his reasons why the deductions should not be made. Except with the permission of the Commissioner for Labour, the total amount of such deductions must not exceed 25% of the employee's one month's salary, and such deductions may only be made on a once-off basis.
- For cost of meals supplied by the employer at the request of the employee.
- For house accommodation or for amenities and services supplied by the employer and accepted by the employee. Deductions must not exceed the value of the accommodation, amenity or service supplied.
- For the recovery of advances, loans or adjustment of overpayments of salary. Advances may be recovered in instalments by deductions from salary spread over not more than twelve months. Each instalment shall not exceed 25% of the salary due to the employee for the salary period.
- For income tax payment.
- For CPF contributions.
- For contributions to superannuation scheme or provident fund or any other scheme at the request of the employee in writing. However, these schemes must be lawfully established for the benefit of the employee and are approved by the Commissioner for Labour.
- For payments to any registered co-operative society with the written consent of the employee.
- For any other purpose which may be approved upon application from time to time by the Minister for Manpower.
Maximum amount of deductions
The maximum deduction amount in respect for any one salary period is 50% of the total salary. IT DOES NOT INCLUDE deductions made for:
- Absence from work;
- Payment of income tax;
- Recovery of advances/loans; and
- Payments with the consent of the employee, to registered co-operative society in respect of subscriptions, entrance fees, instalment of loans, interest and other dues payable.
However, when the contract of service is terminated, the deduction from the employee's last payment of salary may exceed 50%. This is to enable the employer to recover any sum of money owed by an employee to him.
- From 1 April 2014, deductions for accommodation, amenities and services shall not exceed 25% of the employee’s salary. The maximum deduction amount in respect of any one salary period remains 50% of the total salary.